FLAC reaction to new mortgage arrears figures 28 Feb 2011

28 February 2011

FLAC Press Advisory, Monday 28th February 2011. Dublin.
Following on the release by the Financial Regulator of the Central Bank of new figures for mortgage arrears on family homes, FLAC has issued its analysis of the effect of the figures.

According to FLAC's senior policy researcher Paul Joyce "The steady climb in the number of residential mortgages in arrears - up 16,000 in 2010 - continues a trend already apparent to FLAC in 2009. These figures show not only the need for diligent adherence by lenders to the revised Code of Conduct on Mortgage Arrears but also the need to develop and implement stronger measures to actually address the mortgage arrears problem and indebtedness in Ireland generally."

FLAC's director general Noeline Blackwell said: "We were encouraged that all political parties addressed this urgent need in some way in their manifestos. Given the increasing number of home mortgages in trouble and the serious levels of personal over- indebtedness in Ireland, the government must act quickly to implement reform. A number of proposals already exist to help guide this process."



Arrears and reschedules:
The steady climb in the number of residential mortgages in arrears continues, following the publication of the Central Bank's latest quarterly figures for the final quarter of 2010. 44,508 (or 5.7%) of the total are now in arrears for three months or more and 31,338 (over 70%) of this total have been in arrears for over six months.
For the first time, official figures have been released on the number of residential mortgages that have been rescheduled by lenders. These figures show that 59,229 (or 7.5%) have been rescheduled, with nearly 40% of these involving an interest-only payment.
The figures show a substantial overlap of mortgages that are both in arrears and have been rescheduled, with a total of 24,024 (or 3%) coming into this category. In effect, this means that a total of almost 80,000 (or one in ten) residential mortgages are in difficulty.

Repossession cases and court orders
The number of new repossession cases brought is also showing a worrying increase. 297 new cases were brought in the fourth quarter of 2010, up from 210 in the third quarter, which in turn was an increase from 170 in the previous quarter. This demonstrates that following a period of reduced legal activity, lenders are resorting in greater numbers to the courts.
This is also shown by an increase in the number of Possession Orders granted, up from 98 in the third quarter to 119 in the fourth quarter of 2010.

Actual repossessions of properties
Once again, the number of properties that returned to lenders during the quarter substantially outnumbered the number of repossessed properties that they managed to dispose of. This has been a consistent trend since compilation of these quarterly figures began. Thus, 106 returned to lenders but only 42 were sold.
It is also notable that the number of voluntary surrenders/abandonment of properties by borrowers (72) exceeded the number of repossessions by court order (34), by a factor of over two to one. Thus, 585 repossessed properties are now in the hands of lenders, up from 521 at the end of the previous quarter.

2009/2010 comparison
The release of the final quarter figures for 2010 also enables a comparison to be made between the position at the end of 2009 and the end of 2010. Points of note include:
- 28,603 accounts were in arrears for over three months at the end of 2009. By the end of 2010, this had increased to 44,508, an increase of 16,000 households (or 56%)
- The number of accounts in arrears of six months or more is running consistently at around two in every three (67% at the end of 2009, 70% at the end of 2010)
- The number of repossessed properties in the hands of lenders has increased from 397 at the end of 2009 to 585 at the end of 2010, an increase of 188 (or 47%)

Editors' notes:
1. FLAC (Free Legal Advice Centres) is an independent human rights organisation which works to promote equal access to justice for all. It runs a lo-call telephone information line giving general legal information and supports a network of evening FLAC clinics around Ireland. FLAC has produced research reports in the area of personal debt: 'An Ends Based Means' and 'To No One's Credit' in 2003 and 2009 respectively.
2. FLAC has prepared guidelines on the code of conduct on mortgage arrears accessible at:
3. In addition to FLAC's work over the years, The Government's Expert Group on Mortgage Arrears and Personal Debt have issued recommendations in July 2010 ( and November 2010 (press release at dealing with the crisis in mortgage arrears. The Law Reform Commission issued its paper with substantial recommendations for reform of personal debt law on 16 December 2010.
4. The Central Bank's Code of conduct on mortgage arrears can be accessed at: